Waterford Chamber has been approached by a number of the larger employers in Waterford, asking us to make representation on their behalf regarding the Small Benefits Exemption Scheme. This Scheme is largely welcomed by employers and they are ancious to maximise it for the benefit of their employees. However, there is a restriction which is causing problems and Waterford Chamber has asked Minister for Finance, Michael McGrath to review it.
Under Irish Revenue rules, the scheme allows employees to receive up to two benefits (in voucher or non-cash form) in a calendar year, with a value of up to €1,000 free from tax - once all conditions are met.
Gerald Hurley, CEO of Waterford Chamber commented, "As you can imagine, vouchers received by employees in Waterford are mainly spent locally in Waterford in the run up to Christmas and into the new year, so it’s great for the local businesses at that time of year.
"The challenge for employers is that the exemption applies to the first two events during the year – you cannot choose which events can be covered during the year in order to maximise the relief. The main objective for most companies is to preserve a Christmas voucher received by all eligible employees in November of each year."
"Revenue have issued guidance which would imply that gifts (even of low value) to individual employees will be taken as a qualifying event for this Small Benefits Exemption Scheme, thereby running the risk that benefits later in the year will be fully taxable. In addition, a number of employers operate an internal recognition or incentive programme, whereby employees can redeem vouchers/non-cash benefits on receipt of such performance awards. These often have a low value and after two redemptions, the employee is no longer able to benefit from the scheme.
"While the €1,000 is a most generous sum, Waterford Chamber has asked the Minister to reconsider the limitations of two benefits so all employees and benefit fully from the scheme. Christmas vouchers in particular are often essential for families, with the added expenses and of course the rising cost of living."
